In Alabama, sewer woes spur war on water costs

Michael Connor
Reuters Environmental Online Report

Nov 15, 2011 15:57 EST

BIRMINGHAM, Alabama (Reuters) - Dogged by soaring sewer rates, Alabama social worker Mary Jones and her friends are finding novel ways to keep from flushing their income down the toilet -- literally.

In the last year, Jones, 76, started using dirty dishwater for flushing to reduce her Jefferson County sewage costs in response to rates that have more than quadrupled in the last 15 years.

Massive renovation costs for what locals call a "gold-plated sewer system" and its "Taj Mahal" waste treatment plant are behind the precipitous rise in rates.

The renovation of that plant years ago is what caused Jefferson County last week to file the largest-ever municipal bankruptcy in U.S. history to settle $3.14 billion of sewer-system debt.

The project to upgrade the sewer system, started in the 1990s, was supposed to cost about $300 million, but debt surpassed $3 billion due to political corruption, bad bond deals and construction problems.

Some 22 people, including government workers and elected officials, have been found guilty of corruption crimes. The county had been on the brink of insolvency since Wall Street's debt crisis hit three years ago.


Beyond the headlines, the fiasco has hit local residents where it hurts -- their wallets. County residents are set to pay higher sewer bills for years to come.

Jones knows the pain of seeing such costs rise personally. She works part-time at the Greater Birmingham Ministries social-services group in Birmingham where she lives, helping people struggling with their bills.

But she's on a fixed income herself of $2,494 a month, including Social Security payments. So she and friends also curb their metered water use, which determines sewage fees, by reusing dishwater and collecting rainwater.

"My bill went from $60 a month to an average of $23 a month every month for the last year," Jones said.

County sewer rates shot up 329 percent in 15 years, even as surging capital and interest costs forced Jefferson County, Alabama's most populous, to default on debt and lay off workers.

Jefferson County sewage services in the mid-1990s cost an average $15 monthly, but now, as part of a bill that includes other fees for fresh water, cost about $38, according to the system's court-appointed administrator.

Waste water fees at similar systems ran a median $33.01 a month in 2010, or $5 less than Jefferson County, according to a survey by the American Water Works Association trade group.

Across the United States, water and sewage rates vary widely and are rising faster than inflation largely because utilities are replacing worn-out facilities built in the 1970s and 1980s, according to Chris Woodcock, president of water-rates consultants Woodcock and Associates.

But Jefferson County's 660,000-some residents are facing whopping increases in coming years, in part to pay for the mistakes of administrators who made a mess of the project.

Last week's bankruptcy filing blew apart a negotiated settlement with creditors that included unpopular sewer rate hikes of 8.2 percent annually for three years. John Young, the system's administrator, said the hikes now would need to be 10 percent or more.

Those increases far outpace a 15-year national average of 4.9 percent in sewer fee hikes in the American Water Works survey and would take the typical Jefferson County sewer bill to $48 to $51 over three years.


In Jefferson County, where 16.5 percent of residents have incomes below America's official poverty line, the sewer rates and looming increases weigh especially heavily on low-income households.

The tipping point on sewer fees for many local poor came about 10 years ago, when workers at local social services groups started getting requests for more than secondhand clothes and food.

"We began to get requests for help with water/sewer bills," said State Representative Merika Coleman, a Democrat who had worked at the Greater Birmingham Ministries.

Low incomes are even more prevalent in Birmingham, Alabama's largest city. According to the U.S. Census, 26 percent of its residents are poor, or nearly double the national rate of 14.3 percent. Birmingham's per capita income last year was $19,724, or $7,300 below the U.S. average.

According to a rule of thumb used by federal officials to gauge affordability, homeowners should not pay more than 2 percent of annual income for sewage services, The possible hikes of 10 percent would push bills to nearly 3 percent or more of Birmingham's 2010 per capita income.

"It's ridiculous," said Julie Howard, 38, the mother of 10 adopted children and one foster child. "Even with a front-load washer, it is ridiculous. I try to be as efficient as possible and overstuff it. I will also watch the kids closer on their shower time."

Joe Hay, 78, said a water leak in October spiked his bill to $225, but that ordinarily his combined water and sewer bill runs about $120. "I'd like to move ... to get away from Jefferson County's sewer system," Hay said.

The possible rate hikes feature prominently in local politics and fed both street-level demands that the county file for bankruptcy and talk in the Birmingham City Council about filing a lawsuit to block rate hikes.

The single dissenting vote last week among the five county commissioners voting on the bankruptcy filing was by George Bowman, who represents some of the neighborhoods where the sewage fees eat up the largest share of incomes.

Bowman also voted in September against the negotiated deal, which the county had expected to cut its sewer debt by at least $1 billion -- but included the 8.2 percent rate hikes.

"They are balancing this debt on the backs of the poor," Bowman said.

(Additional reporting by Verna Gates; Editing by Leslie Adler)

Source: Reuters Environmental Online Report


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